What is the Green Deal?

Green Deal fast facts

The Green Deal is essentially a very cheap loan scheme to

pay for energy-saving measures which will make the UK more energy-efficient.

Why is this being done? Firstly, our homes suffer from a

shocking amount of heat loss. Secondly, Britain has ambitious targets for

cutting carbon emissions, and the Green Deal is an important part of meeting

those targets.

The golden rule of the Green Deal means the amount you save

on your bills will always be greater than the cost of the energy-saving

measures.

The cost - up to a current maximum of £6,500 - is absorbed

into the future energy bills of your home and paid back over time.

An estimated 26,000,000 homes could be eligible for Green

Deal financing.

What is the Green Deal?

The Green Deal will help fund energy-saving upgrades for

your home without any upfront costs. Instead, the costs are added to your energy

bills and staggered over time, like a loan.

So if you want to replace your boiler with a more

energy-efficient model, or want to install draught-proofing or loft and wall

insulation you can do so without the upfront cost.

You'll still pay for them, but the cost will be repaid over

time as an additional charge on your energy bill. However, the 'golden rule' of

the Green Deal means that your repayments will have to be less than the money

you will save on your energy bills.

The Green Deal is essentially a loan from the private

companies installing these energy efficiency measures. There's a maximum amount

of £6,500 per household and, crucially, this is tied to the home rather than

the owner, so if you move house the debt is passed on to whoever lives there

next.

The loan is then paid back through the electricity bill over

a 25-year period.

Unlike many other home improvements initiatives, the Green

Deal is not dependent on people's income and the loans are available to

everyone.

How will it work?

From a customer point of a view there's a few key steps you

will have to take:

First, you need to decide what needs to be done to your

home. You'll have to get a property assessment, which will be done by specially

accredited advisers who will visit your property and assess its current energy

performance and what measures are suitable for you.

Next, shop around. Once you have the results of your Green

Deal assessment you can start collecting some quotes from Green Deal providers

who will give you a range of quotes for the work.

Then all you have to do is choose which provider you prefer.

The work can take place no upfront costs, and you'll only start paying it back

as an additional charge on your energy bills. However, you also have the option

of paying for some of the work upfront if you want.

It's worth bearing in mind that while your 'deal' won't

technically be a loan; the government has indicated your contract will be

entitled to the protection given under the Consumer Credit Act, so they will

have to adhere to the guidelines.

What energy efficiency measures are

available to me now?

Lots! The costs of energy efficiency measures have tumbled

in recent years, with products like solar panels and insulation becoming far

more affordable and commonplace.

Some energy efficiency measures are already subsidised by

energy suppliers, while some customers on certain benefits may be entitled to

theirs entirely for free. Take a look at our insulation, boilers and solar

pages for more information.

Will it save me money?

Yes. Energy-efficiency upgrades like insulation can save you

up to £310 a year, while upgrading your to a more energy efficient boiler can

save you up to £300 a year.

While cost is often the main reason not to take up these

offers, the Green Deal will offer you an upfront loan to be repaid with energy

savings. And once the Green Deal energy loan is repaid, you keep any future

savings.

Can I still switch energy providers with

the Green Deal?

Yes! Your Green Deal will be fully transferable between

suppliers as it is a fixed amount, you don't need a special Green Deal energy

supplier.

What happens when I move house?

Your Green Deal will be tied to your property, not to you,

so if you sell your property the debt will pass on to the next occupier.

The owner must therefore disclose any details of Green Deal

payments when selling or letting their property.

What if I can't pay anymore?

If you default on Green Deal payments you will be treated

the same as customers who default on their energy bills. So, just like if you

don't pay your gas or electricity bill, you could be disconnected.

However there are some safeguards in place to avoid this

scenario. Energy suppliers will have to go through a number of steps to help

you to keep up with your payments, including prepayments meters, and no

disconnection for certain households in winter months.

If you do feel like you are struggling to pay your energy

bills, contact your supplier and see what options are available to you as soon

as you can.

When was the Green Deal  launched?

October 2012. The Green Deal was part of the Energy Act,

which came into force in October 2011, meaning the proposals under Green Deal

itself started rolling out in October last year.

However, don't expect Green Deal energy mayhem straight

away. There will probably be a few providers initially with a gradually

expanding list to choose from.

What safeguards are in place?

The Green Deal has generated a huge amount of discussion,

with a lot of concern centering around protection for customers.

However, there are already some protection measures already

in place, including:

·

an assessment from an authorised Green Deal

assessor to determine what is suitable for you;

·

authorised installers meeting high standards;

·

existing legislation governing miss-selling,

unfair trading practices and consumer credit agreements, so you should be;

·

clear obligations on Green Deal participants to

work within a robust Code of Practice;

·

clear confirmation procedures before the Green

Deal charge can start to be collected;

·

collection of the charge through the electricity

bill, which is regulated by Ofgem;

·

clear processes to follow when a property

changes hands, to ensure people know about the Green Deal before they move in;

and

·

making it clear when a customer may be required

to pay the Plan off early before they enter into a Green Deal plan.

You can find out more about Green Deal energy on the Department

of Energy and Climate Change website or call R.J.Mchardy Somerset on 01823

211067